At&t Rejects Ncr`s $110-a-share Proposal

The surprising turn in this takeover battle capped a day of confusion and hastily arranged meetings between the two camps. It is believed the takeover discussions are over, leaving each side the chance to blast the other at back- to-back special and annual meetings of NCR shareholders in Dayton Thursday.

At those meetings, AT&T will seek to oust at least four and perhaps all 12 of NCR`s directors in order to press its bid for the Dayton computer company.

In a brief statement, AT&T said discussions were held Wednesday between the companies` financial advisers at the request of NCR.

``NCR`s representatives proposed a transaction at $110 per share. AT&T said it would not meet that price,`` AT&T said.

No reason was given for AT&T`s stance, and AT&T wouldn`t say if it budged above its current proposal of $100 a share, or about $6.78 billion.

NCR declined to comment.

On Monday, NCR Chairman Charles E. Exley Jr. held a five-hour meeting with AT&T Chairman Robert E. Allen to discuss a possible takeover of NCR. At that meeting, Exley didn`t give an asking price and didn`t repeat his previous statement that the firm was worth at least $125 a share.

On Tuesday, Exley and Allen provided conflicting accounts of why their talks had reached an impasse and why no further meetings were planned.

On Wednesday morning, Allen told analysts and reporters in a conference call that no meetings were planned that day and that it was unlikely any agreement could be reached before the shareholders meeting.

Sources said Exley called Allen about midday Wednesday and said he was willing to resume discussions. The sources said that investment bankers for AT&T and NCR quickly arranged a meeting that lasted into the evening.

In the Wednesday conference call, Allen indicated his firm was expecting only a partial victory in its proxy fight against NCR, but was considering further steps to pressure the firm into serious merger negotiations.

Allen said AT&T is considering calling for another special meeting of NCR shareholders and legally challenging any attempt by NCR`s board to reappoint incumbent directors who don`t win re-election Thursday.

At the special meeting, AT&T nominees will need a vote of 80 percent of NCR`s outstanding shares to replace all 12 NCR incumbents. That is a daunting figure, considering that fewer than 80 percent of NCR shares have been voted at the last four annual meetings.

At Thursday`s annual meeting, AT&T will need only a majority of the votes cast to replace the four NCR directors up for re-election. Those four include Exley and NCR President Gilbert Williamson. Exley has acknowledged AT&T is likely to win four seats, but not 12.

Allen told the analysts that 80 percent backing ``is a very difficult vote to obtain.``

But he said he hoped shareholder support in that vote ``would be there at a high enough level . . . that there would be a clear message to the (NCR)

directors that we ought to get on with serious negotiations.``

He said a high vote total also might be persuasive to the federal judge in Dayton who is hearing AT&T`s lawsuit against NCR`s poison-pill takeover defense.

Allen said AT&T might legally challenge any attempt by the NCR board to reappoint Exley or any of the other directors who may be unseated at the meeting.